Reddit is one of the most popular social media platforms because it has great systems that incentivize content creation and engagement.

One of these systems is the Moons token, introduced to reward millions of Reddit users with actual monetary value for their contributions. Luckily, it's easy to understand how Moons work and get hold of some if you're a Redditor.

What Are Reddit Moons?

Moons are tokens on Reddit that users can earn and spend within the social network. They were introduced in May 2020 to reward millions of Reddit users for their content contributions and accumulated reputation.

Reddit has other incentives to encourage content creation, most notably Reddit's Karma credits, which are earned through posting, commenting, or awards. However, karma credits had no monetary value.

Moons have a monetary value that can be decided by the market. Precisely, Reddit Moons are ERC-20 tokens on a Layer-2 solution called Arbitrum Nova, which allows for fast and cheap Ethereum transactions.

What Is a Reddit Vault?

The Vault is an Ethereum wallet where Moons are stored. It's built inside the Reddit app (available for iOS and Android) and is the main way Reddit users see their balance and spend their Moons. The other route to access Moons is through a computer browser, using your vault password and a push notification on your phone.

Vaults act like cryptocurrency wallets; they generate a public address that stores the Moons and a private key that gives access to the Moons. If you lose access to your device, Reddit provides an option to restore your vault in your account. It also has access to your public address, which is used when sending rewards.

How Do Reddit Moons Work?

Moon runs on Ethereum and is the official cryptocurrency for the r/CryptoCurrency subreddit. By design, they are compatible with all applications and assets built on the Ethereum Virtual Machine.

They are pseudonymous, which means you cannot know the identity of the owners. Also, they are owned and controlled by the users, independent of Reddit, and once earned, no one can take them.

How Do You Earn Reddit Moons?

Reddit Moons incentivize quality activity in the r/CryptoCurrency subreddit. So you earn Moons depending on your contribution, available Moons, and a subreddit's rules.

Sharing original, high-quality content that attracts discussions within a subreddit is the most effective way to earn Moons. As people engage with your posts, they'll upvote you. The difference between your gross upvotes and downvotes, i.e., net upvotes determine your karma credits, which determine the Moons you're awarded.

Besides sharing high-quality content, you can earn Moons by commenting insightfully and meaningfully on other posts and comments. Funny, provocative, or insightful comments attract upvotes, adding to your total contribution score.

Furthermore, there are Karma modification rules decided upon by the community that can boost the number of Moons you earn. The full list of modifiers can be seen on the Moons Wiki. For example, you can earn twice as many Moons for posting on posts marked [Serious], twice as many Moons on comments, and a five percent bonus for voting on governance polls (that decide the direction of the subreddit).

How Are Reddit Moons Distributed?

Moons are distributed through a system known as "community points." First, moderators decide the number of Moons to award for various activities within a specific subreddit. This means the number of Moons awarded may differ from one subreddit to another.

Redditors' contributions within a specific subreddit are weighted using an algorithm that checks quality and quantity, and they're awarded a contribution score. The algorithm then distributes Moons based on the share of the subreddit contribution score active users have earned.

Moons distribution occurs once every 28 days. While previously, users had to claim their assets after each round, and the scalability upgrade enabled users to automatically get their Moons as long as their vaults were well set up.

How Was Moons' Scalability Issue Solved?

Initially, Moons were developed on Ethereum and therefore inherited the blockchain's scalability challenges. The distribution of Moons was a slow and inefficient process, and users had to claim their tokens periodically actively.

But this changed when Reddit integrated Arbitrum Nova, a Layer-2 network designed specifically for gaming and social applications while increasing the speed and efficiency of Ethereum transactions.

Through this upgrade, Reddit reduced the transaction fees associated with Moons distribution and made it instantaneous. Redditors no longer have to wait to get their Moons. In addition, the upgrade made it possible to have batch transactions, which significantly made distribution more efficient than before.

How to Use Reddit Moons

Moons can be used for various purposes within the Reddit ecosystem.

1. Buy Special Memberships: You can use Moons to secure a monthly pass to the r/CryptoCurrency subreddit. This paywall was instigated courtesy of the rapid growth of the subreddit, which attracted underage and inactive members. The paywall costs 1,000 Moons or $5 monthly. As a special member, you can have colorized usernames, loyalty & stylized badges, animated emojis, and GIFs in comments.
2. Boost poll answers: Moons can help highlight popular responses to a poll. For example, Reddit allows members to use Moons to upvote posts and comments, which helps amplify the views held by most members, making it clear what's more valuable to the community. A good demonstration of this was the Moon Voting Rounds 15 to 18, which features a series of polls on the incentive system.
3. Tipping: Moons can be used to tip other content creators. Just like Karma credits, tipped Moons are a show of appreciation for the efforts put into creating valuable content and encouraging more contributions. In fact, there has been a growing trend called Moon Farming, where professionals ditch their jobs to become full-time active contributors with strategies and consistent income from the cryptocurrency subreddit.

Outside the Reddit ecosystem, Moons can be exchanged for cryptocurrency using platforms such as xDai and Honeyswap or for fiat currencies.

Reddit Moons Burning

Reddit Moons are burned as part of a deflationary mechanism. They are removed from circulation, ensuring that distribution will not be limited to new issuance. Burning involves sending them to a burn address, but they can be reintroduced for distribution later.

Moons are burnt in two ways; the purchase of premium memberships or the redemption of moons for Reddit coins. In both instances, they are sent directly to a burn address upon initiating the transaction. Meanwhile, admins burn moons on your behalf when you pay for premium memberships with cash.

The exact amount of Moons burned each month varies depending on factors such as activity levels and demand. Also, the burn schedule is always subject to change but typically occurs in the early days of each calendar month.

What Is the Future of Reddit Moons?

Reddit Moon is one of the best examples of how cryptocurrency can be used to extract real value from our contributions on social media platforms. It takes what Karma credits did to incentivize content creation and engagement, giving it more meaning by creating monetary value. And with the added opportunity for people to make an income by engaging in Reddit conversations, Moon's impact may continue to grow.